Two thirds of UK small business owners are hit with unexpected costs during their first year of operation. And it can be difficult to accurately estimate the total costs of setting up and running a business.
So what can start-ups and SMEs do to bring down costs in the early years? We asked the Business Doctors.
“Working from home can be an excellent way to keep costs to the minimum as your business establishes itself,” says Lawrence Wilson, Business Doctor for Bromley.
“You don’t have the extra fees involved in renting an office and your commuting expenses will be nil. Do bear in mind if you have clients coming to the front door you will need to ensure your insurance policy covers business-related claims and make sure your neighbours are made aware, particularly if you have regular visitors.”
“Consider collaborating with other similar businesses in areas such as procurement, sales and marketing,” says Business Doctor for Leicestershire, Russell Grant.
“Pooling volumes and expertise may enable you to get a better price, share resources, gain economies of scale or benefit from knowledge and expertise. Depending on the business type, you may be able to join a buying group that will help in these areas.”
“Freelancer.com and other freelance sites are an amazing way to get any business task done for substantially less than the UK equivalents, on time and on budget,” says Oxford Business Doctor Ian Roberts.
Another tip from Ian is to consider investing in an online accounting solution such as Sage One or Xero. “For around £25 per month you will vastly reduce the amount of data input you are doing and you will have all the key information you need at your fingertips,” he says.
Business rates is a contentious issue for many owners of small and medium sized companies. Graham L. Morgan, Business Doctor for Cardiff has the following advice: “If you feel you are being asked to pay too high a level of business rates, then don’t just grumble about it, do something! Find a local expert who can undertake a review and submit an appeal on your behalf.”